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Passage of Labor Day brings harvest weather and yield potential into full focus. Some private forecasters are touting that the national corn yield could top USDA’s current estimate of 175.1 bpa. However, early harvest results in the south disappoint. On September 12th, we will get an updated forecast. Regardless of whether yields are higher or lower than USDA’s present projection, stout demand is a must to offset the prospect of a bin busting crop. In the meantime, the rating for corn fell one-point last week to 74 percent of the crop in good-to-excellent condition. According to Ag Watch’s yield model, the national yield is 171.6 bpa. Export inspections were solid last week at 57.8 MB. Meanwhile, the funds are ramping up their shorts and have increased them 110 MB to 850 MB. While demand is stellar, the prospect for a record crop will offer formidable resistance.
Soybeans continue to trade strong demand, but also face the prospect that harvest yields could exceed 50.0 bpa. Last week, the rating for soybeans remained unchanged at 73 percent of the crop in good-to-excellent condition. This is a record for the first week of September. According to Ag Watch’s yield model, this equates to a national yield of 50.3 bpa. USDA will give us an update to their estimate next week. However, do not count on them raising the yield to 50.0 bpa, just yet. Exports remain strong with inspections last week 45.2 MB. China took 19.2 MB or 42 percent of shipments. Meanwhile, the funds have reined in their longs as they reduced them 175 MB to 380 MB. Next week’s crop report will determine whether they will lighten the load further, or add to their position.
There is not a lot to say about wheat as it does not have much of a story to tell. Spring wheat harvest is winding down at 91 percent done. Exports are respectable with inspections last week at 23.9 MB. This was the largest amount recorded since late July. If the pace continues, shipments could top 1.070 BB compared to USDA’s projection of 950 MB. However, this has not deterred selling by the funds as they increased their shorts last week 70 MB to 690 MB. This is short of the record of 765 MB.
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